So, looks like single payer advocates went out, sponsored a study of what their single payer plan would look like. Its not an unreasonable proposal and certainly has better topline numbers than the study put out by the chief sponsor's senate committee staff. You download and read it here.
Set aside the revenue provisions. I view those as a mainly political problem, albeit a gigantic critical one. Single payer advocates agree that the program should not run a deficit and should pay for what it promises. So far, they propose a mix of locally imposed taxes and basically hoping the Federal Government turns over all the money it spends on healthcare over to the state government. As to what is politically possible, we shall see.
No, the real issue is the cost. More specifically, the cost controls. The Nurses' plan would achieve savings through the following methods:
- 6.7% cut in administrative costs. The study doesn't specify how this is done, but the bill could simply mandate a cap on administrative expenses.
- 3.4% cut in pharmaceutical costs. I assume this means successful negotiations with Big Pharma on very specialized brand name drugs. 8 out 10 prescriptions are for generics, off patent and all relatively cheap. Still, savings are savings.
- 2.9% cut in provider payments by mandating Medicare's rates. This is the boldest and most honest provision yet. You've gotta hand it to the nurses... clearly willing to put their jobs and salaries on the line. God bless em. Medicare pays just a little bit more than cost. The study doesn't talk much about what happens when providers can't make money on their non Medicare patients but they say they don't expect providers to ramp up the numbers of patients or procedures. Becuase... they just won't. Still, as a price control measure its the best one available. Doctors and Nurses are just going to have make less money and we will need less of them. Simple. Close hospitals. Makes sense.
- 5.0% cut in 'inefficiency, fraud, and unnecessary' stuff. This is about the only unbelievable part of their proposal. But I'll leave it at that for now. They also propose no specific actions to accomplish this.
Ok, so by cutting healthcare payments, mainly to providers, and a whopping 11.7% worth of overhead(!) the Nurses plan did bring down costs by 18% to about $331 billion. Of course, this assumes cooperation with the Federal Government across a series not only White House regulatory cooperation, but in the case of ERISA people for example, some 3.7 million in California, actual new legislation from the Congress and signed by the President. If they don't get that cooperation, they will have to do different numbers on both the taxing and revenue side.
We should note none of these provisions are actually in the bill yet. The big difference between this study and the staff study is cost. The staff assumes single payer would get its savings from using Medicare rates and that's about it. It also assumes that people who pay no deductible or copays will use more healthcare, and that also covering the uninsured will increase aggregate expenses.
Back to the revenue side. I think thr sales and business taxes are both reasonable provisions and show bold, clear thinking. Healthcare costs money and somebody has gotta pay. I've always thought broadly taxing consumption to be both favorable and preferable to taxing income. Taxing all business income above $2 million is not unreasonable. The gross receipts tax is without question a substantial tax increase over the current one but business needs to be convinced that this tax won't go on autopilot. For example, a company with $5 million revenue pays $11,790 now will see that number skyrocket up to $126,790. That's still a good deal off what they'd pay in equivalent premiums in many cases.
The study did not address political or legal problems at all, and being professors, why would they? But there are Constitutional problems nevertheless. Like the Gann Limit or Proposition 98. Still, these are all political and legal hurdles for the proponents.
This proposal is about the best single payer plan I've seen so far. Its got a lot of pie in the sky, but what proposal doesn't? Not quite a mature bill yet, but if these proposals are put in it will be a better bill.